Are you thinking that you can trade in your financed car for a lease? YES. All you need to do is to determine what the best option would be. Is it better to keep the car you currently have or swap it out for a new one?
How can you trade in your financed car for a lease?
Two easy ways to trade in your finance car for a lease:
Finding your vehicle’s worth
- Willing to know the estimated worth of your financed car, no worries as there are online tools available that will help to give you a good idea of the value of your vehicle. You can get an idea of fair value for your old car with a car pricing guide there.
- Another easy way is to take your car to your local CarMax and they’ll give you a number they’re willing to purchase your vehicle for in 30 minutes or less.
Find out how much your payoff is
- First, you have to call the bank you’re financing your car with and ask them for the payout. Then ask them for a 10-day payout to give you time to sell your car.
- “Upside down” means that the value of your car is less than the amount you owe the bank. For example, if your car is worth $10,000 and you owe the bank $12,000, you’ll have a $2,000 balance after you trade in your financed car for a lease. To get away from that balance, you need to either pay it off with your cash or roll that balance over to the next bank loan. If you make it pending over to the next loan, you’ll start going “upside-down” on your new car. It isn’t an unusual situation but something most people want to avoid.
- Positive equity eventually occurs when the value of your vehicle is worth more than the value you owe the bank. For example, if the value of your vehicle is $15,000 and you owe the bank $11,000, you’re in a positive situation since you’ll have an extra $3,000 cash remainder to put toward a new car. Or even just keep it in the bank. After you analyze your situation, you’ll be able to make a better decision on what’s best for you.
Also, read How to Finance a Knockdown Rebuild: A Guide
Can you trade in a financed damaged car?
If your car is damaged, then it will automatically lose its value. For this, you should fix and maintain the car first. Otherwise, the damage will affect the cost price. You can also look into trading in a lower price car. But, keep in mind that not all dealerships will accept trade-ins with damage.
Conclusion:
You can trade in your financed car for a lease as it can be a great way to upgrade to a newer model. But, before doing so you have to consider the above-mentioned things. The process could become complicated if you’re still making payments on the car. If you are wanting to trade in a financed car, don’t forget to pay off the bank loan first. You should also keep in mind that the value of the car will devalue over time. The damage will also lower the deserved value of the car. Lastly, it’s best to be ready for your finances including your credit score. By doing so, you’ll be able to negotiate a better deal on your new car.
Also read: Should you buy an electric car? Advantages, Disadvantages and some FAQs about Electric Cars